Philippines inflation probably moderated further on lower food inflation

The Philippines will release April inflation data on 5 May. Inflation is expected to have moderated to 2.2% y/y from 2.4% in March, although on a m/m basis it likely picked up to 0.2% from -0.1% in March. 

Base effects for food inflation continue to recede. Food inflation eased to 4.3% y/y in March from a peak of 8.3% in August, and it is expected to have eased further in April. 

However, the fuel price hikes in April likely increased transport inflation and limits further downside to y/y inflation. 

The inflation rate is expected to move closer to the lower end of Bangko Sentral ng Pilipinas' (BSP's) target of 2-4%, although it may accelerate towards year-end as base effects turn unfavourable. 

"We expect inflation to average 2.2% this year, versus a YTD print of 2.4%", says Standard Chartered.